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Virtual World IMVU Combines Social Gaming And Avatars

Anxious to tap into a budding
market, virtual world IMVU on Tuesday began offering casual and social games through partnerships with developers like Viximo, Heyzap and OMGPOP.

"From a business perspective, games
combined with our social networking and virtual goods economy is the natural direction to take IMVU to the next level of growth," said Cary Rosenzweig, CEO of IMVU.

Indeed, Americans now spend
about 10% of their time online playing games, according to a recent study from Nielsen. Driven largely by the popularity of gaming on Facebook, meanwhile, the social gaming market has exploded. This
summer alone, News Corp.'s IGN Entertainment debuted a social gaming network dubbed MyIGN; Zynga raised $150 million from Japanese wireless carrier Softbank; and Google acquired social media gamer
Slide for a reported $180 million.

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Per Tuesday's announcement, IMVU community members can now log in to the IMVU 3-D Chat or Web site to select from more than 75 social and casual games. It was
not immediately clear that the company plans to monetize its gaming section.

Founded in 2004, the avatar-based virtual world derives most of its revenue from virtual currency, which is used to
purchase virtual goods like clothing, detailed facial features, and furniture. Late last year, the company said it achieved profitability, and doubled its revenue to $25 million year-over-year.

Along with 6 million unique visitors per month, the company claims to have the largest virtual goods markets of any online community, with more than 3 million items created entirely by IMVU members.
In the last 30 days alone, over 35,000 developers have sold virtual goods in IMVU's catalog, while user-developers add more than 4,000 new items to the catalog every day.

The virtual goods and
currency market will reach an estimated $1.8 billion this year, as 12% of Americans report having bought a virtual item at some point over the last 12 months, according to a recent study by analyst
firm Frank N. Magid Associates and commissioned by virtual currency provider PlaySpan.

According to Rosenzweig, nearly 70% of IMVU's community is female, while nearly 60% is over the age of 18.
Presently, Rosenzweig says the company is investing most of its profits to hire more employees and improve customer experience. He also expects profits to increase thanks to low operating expenses,
which he attributes to extremely efficient back-end technology.

To date, IMVU has raised nearly $30 million from investors including Best Buy Capital, Menlo Ventures, Allegis Capital and
Bridgescale Partners.